New Delhi,The National Bank
for Agriculture and Rural Development (NABARD) has informed that it has reduced
the interest rates on long term refinance facility to banks by 0.20% p.a. with
effect from 9th June, 2014.
NABARD has further informed that it has recently introduced a scheme of
providing refinance at concessional rate for specific activities under the
Plantation and Horticulture viz, Production of exotic/high value vegetables
under controlled conditions, cut-flowers for up-markets, establishment of
hi-tech/export oriented horticultural projects, financing of fruit crops like
banana, pine-apple, papaya, etc, cultivation and extraction of essential oils
etc, as also for area based schemes for which banking plan has been prepared by
banks. The rate of interest on these specific activities will be 0.5% less than
the applicable rate of interest on refinance charged by NABARD from time to
time.
NABARD has also reported that it provides refinance assistance to the banks
against their ground level loan disbursements for eligible activities under
Priority Sector. Objective of such refinance is to boost capital formation in
agriculture and rural economy, which leads to enhancement in ground level
credit for agriculture.
As regards mechanism for monitoring and regulating the rate of interest, NABARD
has stated that the ground level interest rates are fixed by respective banks
since interest rates on loans have been deregulated by Reserve Bank of India.
This information was given by the Minister of State for Finance, Smt. Nirmala
Sitharaman in written reply to a question in Lok Sabha today.
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